Rated Fund 2016-2017. Benefiting from falling as well as rising share prices

Old Mutual UK Dynamic Equity was highly commended in Money Observer's 2016 fund awards. Managed by Luke Kerr since 2009, it targets capital growth through investment in small and medium-sized UK companies.

Kerr is part of Old Mutual's UK mid and small-cap team so he is able to benefit from their best ideas. He looks for strong, fast-growing companies whose shares he expects to rise in price but he can also 'short' stocks he believes are going down in price. This gives the fund an advantage in volatile market conditions.

Kerr says the difference between his fund and traditional funds is that while others are typically 90-100 per cent invested in shares, he can have as little as 60 per cent invested, with the remainder in cash.

He can then use up to 30 per cent of the fund to take short positions in stocks that he thinks will go down in price and thereby provide him with a positive return. This means that the fund can be anywhere between 30 and 100 per cent exposed to equities.

So if he believes the equity markets are going up, the fund will behave much like a traditional fund and have little or nothing in short positions.

However, if he believes the market is falling he can reduce his holdings to 60 per cent, take the short book up to 30 per cent and thereby significantly increase the fund's potential to benefit from falling share prices.

?A fund’s ongoing charges figure (OCF) is similar to the old-style total expense ratio. It reflects the annual charge to investors in the fund, in percentage terms, but does not include extra performance-related fees (where these are levied) or the fund’s trading expenses on its underlying investments.

1.1%

Fund size

£569m (£464m last year)

FE Risk score

?FE Risk Scores measure the riskiness of instruments relative to the FTSE 100 index of shares. Weekly volatility is measured over three years with recent behaviour counting more heavily than earlier behaviour. Cash-type investments will have scores close to zero. Funds will tend to have scores in the 0-150 range. The FTSE 100 is always scored at 100. There is no upper limit.

?Alpha is a measure of a fund's over- or under-performance by comparison to its benchmark. If the Alpha is 5, the fund has outperformed its benchmark by 5%; so the greater the Alpha, the greater the outperformance.

12.87

Beta

?Beta estimates a fund's volatility by comparison to that of its benchmark. A fund with a beta close to 1 means that the fund will move generally in line with the benchmark. Higher than 1 and the fund is more volatile than the benchmark and vice versa.

1.15

Sharpe

?This commonly-used measure calculates the level of return over and above the return of a notional risk-free investment, such as cash. The difference in returns is then divided by the fund's volatility. The resulting ratio is an indication of the amount of excess return generated per unit of risk.

1.38

Volatility

?Volatility (or standard deviation), when applied to an investment fund, expresses its risk. It shows how widely a range of returns varied from the fund's average return over a particular period. For example, if a fund had an average return of 5%, and its volatility was 15, this would mean that the range of its returns over the period had swung between +20% and -10%.

12.96

Tracking error

?This measures the standard deviation of a fund's excess returns over the returns of an index or benchmark portfolio. As such, it can be an indication of 'riskiness' in the manager's investment style. A Tracking Error below 2 suggests a passive approach. At 3 and above the the manager will be deploying a more active investment style.

8.69

Information ratio

?This is a useful risk-adjusted measure of actively managed fund performance. It is calculated by deducting the returns of the fund's benchmark from the fund's overall returns, then dividing the result by its tracking error. The higher the Information Ratio the better. It is generally considered that a figure of 0.5 reflects a good performance, 0.75 very good, and 1.00 outstanding.

1.55

R-Squared

?An indication of how closely correlated a fund is to an index or a benchmark. Values for R-Squared range between 0 and 1, with 0 indicating no correlation at all and 1 showing a perfect match. Values upwards of 0.7 suggest that the fund's behaviour is increasingly linked to its benchmark.

0.56

Price movement

52 week high519.34

52 week low411.47

Current bid price-

Current offer price-

Current mid price490.57

Region

1

UK

100%

Industry sector

1

Industrials

23.8%

2

Financials

21.3%

3

Consumer Services

21.2%

4

Consumer Goods

9.4%

5

Technology

8.5%

6

Health Care

7.1%

7

Others

4%

8

Basic Materials

2.9%

9

Unquoted Investments

1.8%

Asset type

1

UK Equities

100%

Individual holdings

1

BOOHOO.COM PLC

6.1%

2

ASCENTIAL PLC

4.1%

3

HOMESERVE

4%

4

MELROSE INDUSTRIES PLC

3.7%

5

FEVERTREE DRINKS PLC

3.6%

6

GVC Holdings PLC ORD

3.6%

7

SMART METERING SYSTEMS PLC

3.5%

8

MICRO FOCUS INTERNATIONAL

3.3%

9

SSP GROUP

3%

Management

Fund manager group

Old Mutual

Fund manager company

Old Mutl Glbl Investors(UK)Ltd

Fund type

No data available.

Fund objective

The investment objective of Old Mutual UK Dynamic Equity Fund is to achieve capital appreciation by taking long and short positions principally in UK equities outside the FTSE 100 Index.

Benchmark

FTSE 250 ex Investment trust TR

Investment style

None

Investment method

Shares

Fund manager

Name

Since

Biography

Luke Kerr

29/06/2009

Luke joined Old Mutual in 2001 and manages the Old Mutual UK Dynamic Equity Fund and Old Mutual UK Specialist Equity Fund as part of Old Mutual Global Investors' highly-rated and multi-award winning UK mid and small cap team. He was previously a consultant at Arthur Andersen. Luke has a BA in chemistry from the University of Oxford, is ACA qualified and is a CFA charterholder.

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This information is sourced from our partner Financial Express. We believe the data to be correct however you should take care in using any information.

You should be aware that prices may fall as well as rise and that the income derived can go down as well as up. When buying or selling any investment that fluctuates in price or value you may get back less than you invested. Past performance is not necessarily a guide to future performance.